Wine Collateral Fraud: British Financier Burton Faces US Court
Stephen Burton, originally from the UK, has been extradited from Morocco to the United States to face charges linked to a major money laundering operation. His company, Bordeaux Cellars, is accused of using fictitious fine wines as collateral to issue loans to affluent individuals requiring immediate funds.
Burton, hailing from Tunbridge Wells, was transported to New York on Friday, 15 December, and made a court appearance on Saturday, 16 December, where he staunchly pleaded ‘not guilty’ to allegations of defrauding investors out of over $100 million from 2017 to 2019.
The alleged scheme, resembling a Ponzi setup, involved Burton and co-defendant James Wellesley operating a firm purportedly mediating loans between investors and wealthy wine collectors.
Federal prosecutors contend that Burton and Wellesley deceived lenders by claiming the loans were secured by wines in the custody of collectors, while assuring profits through interest returns. However, according to the US Attorney’s Office for the Eastern District of New York, these wines “never existed, and Bordeaux Cellars never actually held the wines they claimed to secure the loans with”.
Burton was apprehended in 2022 after entering Morocco with a counterfeit Zimbabwean passport. Meanwhile, Wellesley is on the verge of extradition in the UK.
If found guilty, both could face sentences of up to 20 years for charges of wire fraud, wire fraud conspiracy, and money laundering conspiracy.
Allegations include Burton and co-conspirator Wellesley attending investor conferences to garner interest in their scheme, luring potential investors with the promise of hefty returns backed by cellars supposedly stocked with premium wines like the renowned Napa label, Screaming Eagle.
Employees of Bordeaux Cellars and Bordeaux Cellars London informed investors that their role was to connect collectors, eager to liquefy assets to acquire fine wines, with investors ready to finance. However, prosecutors argue that the wines central to these deals were nonexistent.
